Women now own more than 50 percent of the private wealth in the country, according to a Harvard Business Review study and have also started the most new businesses, employing nearly eight million people.
These numbers show how important women have become to our economy, yet we still lag behind men in having investment strategies and long-term financial goals.
So while we’re taking over the world at work, we seem to be almost insecure about our own money and how to invest and spend it. In a recent retirement report, 60 percent of women said that their greatest financial priority is “just getting by” or paying off debt.
Milieu spoke to a few Long Island women who are considered experts in their field. While we could write a book about money, we’ll give you their thoughts and opinions to digest and perhaps you will be inspired to review your own finances and create a solid plan for your future.
Susan Ganz, MBA Estate and Financial Services Professional at The Center for Wealth Preservation, says that women should develop a financial blueprint for their financial house.
“Your financial house should be filled with ‘rooms’ for the goals that are important to you, such as financial independence, a new home and education for your children,” she explains.
Though everyone’s house is different, they all have some things in common, especially a foundation.
“The foundation normally gets neglected,” Susan says, advising clients to have physical protection for their property and personal liability coverage.
The next level of the financial house is income generating, including passive income like rent and disability insurance coverage. With your house in order, you can enjoy the fruits of financial independence.
Susan sees women’s financial habits in colors:
Red: Spends whatever is left over from the paycheck after paying bills.
Blue: Saves between 15 to 20 percent of gross income and then spends the rest.
Green: Has savings, protection, an investment strategy and is enjoying the dividends from her money.
Susan also advises women to keep up with their financial housekeeping and avoid building what she calls a “financial junk drawer,” because all those loose papers can cause a multitude of problems.
“It’s a collection of insurance policies, legal documents, savings, investment vehicles and real estate that are not necessarily coordinated around a strategic plan,” she says. “As a result, there may be various risks, tax impacts, liquidity considerations and fees that they are exposed to that may be costing them money.”
Above all, Susan advises us to “Get into good habits now, take steps that are comfortable for you.”
When money is tight and you find yourself awash in debt, it might be wise to have someone help you get back on the road to financial wellness. Leslie Tayne, Esq. of Tayne Law Group says she is seeing a new trend with many of her clients.
“They are successful professionals like teachers, attorneys and accountants earning between $150,000 to $250,000 a year and still struggling financially,” she says.
Because of the stagnant economic climate and ever-rising expenses, “Everybody is basically living on a fixed income,” Leslie explains.
The typical rule of thumb is one-third of your net income should be used for housing. Tayne’s clients are above the norm.
“We’re seeing 50 percent and higher and they are getting into trouble,” she says, adding that, “Professional women take on a lot. They don’t necessarily reach out for help. They say they are managing, and that things will get better.”
Until Debt Do Us Part
“Some women have no idea about their finances, and that’s a problem—it should be an equal partnership,” advises Leslie. “Be in the know and don’t stick your head in the sand.”
After meeting with her clients and understanding their financial situation, Leslie re-creates cash flow and utilizes her resources and relationships to assess what creditors are going to be amenable to help them.
“Sometimes it’s too late,” she says, adding that oftentimes her clients wish they had come to see her six to nine months sooner, before they depleted their 401K and savings.
For those who seek help, “I give them relief,” says Leslie. “We strengthen their safety net, which reduces the stress financially.”
Many women have found creative ways to make money, and a passive income stream, such as rental income, is ideal, if feasible. Others have successful online businesses on eBay and Etsy.
Patti Kielawa, vice president and business development officer at Gold Coast Bank, oversees the Gold Coast Ambassador program.
“Our Ambassador program pays for referrals from your friends or business associates who are interested in business banking,” she tells Milieu. “If accepted, you will receive a referral fee for the booked business.”
Simply put, if you know someone in business who needs a banker, you could become a Gold Coast Ambassador. Last year, Ambassadors received referral fees for booked business ranging from $100 to as high as $45,000.
Know the Score
Do you know what APR (annual percentage rate) you’re paying on your credit cards, personal and auto loans?
Patti recommends that before signing on the dotted line for a car you do some research first to decide if you are better off purchasing or leasing a vehicle.
“If you can deduct the vehicle costs for business, consult a tax advisor to find out which is better for you,” she advises.
In some cases, the expense can be deducted from your taxes.
Patti also advises that if you are making a large purchase, more than $7,500, it’s wise to look into an alternative—like a personal loan—for a fixed period of time, instead of charging it on your credit card, which can take years to pay off if you are only making the minimum payment required.
Is housing still a good investment? Since 1975, housing has appreciated by an average of 4.5 percent per year. We asked Joanne Mills, a real estate professional with Exit Realty in Massapequa, her opinion.
“Long Island is such a diverse market, everything varies depending on location, from prices, taxes, neighborhoods…types of housing, from single-family homes, multi-family, condo, co-ops…even mobile homes,” she says.
Everyone always asks if now is the right time to buy a home.
“Based on prices, mortgage rates and soaring rents, there may have never been a better time,” says Joanne.
There are several considerations that purchasers should weigh, she adds. Because of a declining inventory, home prices are projected to appreciate by over 20 percent from now till 2018, for example.
The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rates will rise to more than 5 percent by the end of 2014.
Besides the financial reasons for purchasing a home, most people buy a home for emotional reasons, like wanting a good place to raise their children, more space and a safe neighborhood.
Cania Infante, AVP of Bethpage Federal Credit Union, suggests that if you are considering purchasing a home for the first time or looking to move to another location, you should attend BFCU’s monthly mortgage seminars. The seminars are free and open to the general public.
Their first seminar was titled “Home Shopping 101, Pre-Approval.”
“Getting a pre-approval is a first step to buying a home,” says Cania. “It means that someone has looked at your income, assets and credit and you are pre-qualified for a purchase.”
More than 60 people braved the snow and ice to attend that first seminar, showing, continues Cania, “that there is a need for these seminars.”
“We talk about how buying and selling can affect your credit,” she explains. “What a conventional mortgage is compared to an FHA. We want those attending to have an understanding of what pre-approval is, what lenders are looking for and how long it’s good for.”
Cania says that future seminars will include a panel of local experts in different areas of housing.
“We will help you with budgets and savings plans as well,” she adds. “One of the things I always say is ‘You have to pay yourself first. You need to treat whatever goal you’re trying to accomplish like it’s a bill.’”
Susan Ganz, MBA
Registered Representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC., Member SIPC, 6800 Jericho Tpke., Syosset, NY 11791 516-364-4203
Leslie Tayne, Esq.
Tayne Law Group, P.C., 150 Broadhollow Rd., Suite 213, Melville, NY 11747, LTayne@TayneLaw.com
VP Business Development Officer, Gold Coast Bank, 2929 Expressway Dr. North, Islandia NY 11749, firstname.lastname@example.org
Licensed Real Estate Sale Agent /Agent Trainer, 2014 Women’s Council of Realtors® President, 2014 Libor director, 631-836-5289, JoanneMills.com
AVP Marketing, Bethpage Federal Credit Union, 899 S. Oyster Bay Rd., Bethpage, NY 11714, 516-349-6990